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Illya Gerasymchuk
Entrepreneur / Engineer

⬇️ My Thoughts ⬇️

User Illya Gerasymchuk -

2025-09-16 12:49

ECB's legal framework forbids the use of gold revaluation proceeds to pay expenses or operating losses unrealized gains are not recognized as income and are instead credited to the revaluation account revaluation account is under liability/equity on the ECB's balance sheet

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User Illya Gerasymchuk -

2025-09-15 21:09

to clarify: European Central Bank didn't increase its gold holdings, but the gold that ECB already owns (β‰ˆ506 tonnes) increased in value, since gold's market price increased ECB reevaluates gold at the end of every year and credits or debits the revelation account accordingly

User

πŸ‡ͺπŸ‡Ί ECB gained €10.5B on gold from 2023 to 2024 2025 YTD running gains add another net positive β‰ˆβ‚¬10B & likely to be higher by the year end's gold revaluation that's an implied β‰ˆ8% yield on gold appreciation - much more than the ECB earned from other asset buckets

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User Illya Gerasymchuk -

2025-09-15 20:52

πŸ‡ͺπŸ‡Ί ECB gained €10.5B on gold from 2023 to 2024 2025 YTD running gains add another net positive β‰ˆβ‚¬10B & likely to be higher by the year end's gold revaluation that's an implied β‰ˆ8% yield on gold appreciation - much more than the ECB earned from other asset buckets

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User Illya Gerasymchuk -

2025-09-15 00:33

leverage and the carry trades eventually unwind at some point there isn't enough on-demand liquidity and mass defaults, losses and insolvency occur this is when the cycle tops/bubble pops

User

the financial system is heavily dependent on refinancing this is true for both, governments and the public sector - especially the financial institutions β‰ˆ70% of all new credit is used for refinancing/repaying of existing maturing debt rather than novel financing

User Illya Gerasymchuk -

2025-09-15 00:32

the financial system is heavily dependent on refinancing this is true for both, governments and the public sector - especially the financial institutions β‰ˆ70% of all new credit is used for refinancing/repaying of existing maturing debt rather than novel financing

User

in addition to being a store of value, gold is also acting as an investment it's up β‰ˆ40% YTD this is gold catching up to inflation and accumulated leverage

User Illya Gerasymchuk -

2025-09-14 22:52

in addition to being a store of value, gold is also acting as an investment it's up β‰ˆ40% YTD this is gold catching up to inflation and accumulated leverage

User

the financial system infrastructure, including monetary policies of the central banks are correlated they're heavily exposed to the same set of assets - a lot of which are USD-denominated this is of course extremely pro-cyclical

User Illya Gerasymchuk -

2025-09-14 22:51

the financial system infrastructure, including monetary policies of the central banks are correlated they're heavily exposed to the same set of assets - a lot of which are USD-denominated this is of course extremely pro-cyclical

User

gold is a great asset to hold for the next 5 years it's a hedge against the credit & refinancing bubble of the US equity markets + government debt but not only against USD - all FIAT & risk assets including crypto

User Illya Gerasymchuk -

2025-09-14 22:51

gold is a great asset to hold for the next 5 years it's a hedge against the credit & refinancing bubble of the US equity markets + government debt but not only against USD - all FIAT & risk assets including crypto

User Illya Gerasymchuk -

2025-09-14 14:28

since i've written this, gold is up β‰ˆ16% β‰ˆ25% if you count from the tariffs announcements on April 7th i will re-iterate that in order to protect the EUR the ECB should increase their onshore gold holdings

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User

πŸ‡ͺπŸ‡Ί The best countermeasure that EU can take is swapping US securities for Gold Gold is inversely correlated with USD. Such a decision can be done today and it will: 1️⃣be a response to the US 2️⃣increase value of EUR 3️⃣minimize consumer impact Anything else will hurt the economy

User Illya Gerasymchuk -

2025-09-13 15:01

this makes immovable property a good hedge against inflation and economic downturn price adjusts to value & while the composition of demand may change (e.g. shift towards smaller/cheaper units) - the demand for property will inherently remain high

User

given that housing is a core necessity for most combined with the willingness of banks to finance against immovable property creates a high persistent demand for real estate

User Illya Gerasymchuk -

2025-09-13 14:55

given that housing is a core necessity for most combined with the willingness of banks to finance against immovable property creates a high persistent demand for real estate

User

as the immovable property appreciates, so do your assets and financing capacity. with a more valuable collateral asset - the bank will give a larger loan increasing real estate purchase prices push rent prices up as well. so may increased interest rates, since it's harder to buy

User Illya Gerasymchuk -

2025-09-13 14:40

as the immovable property appreciates, so do your assets and financing capacity. with a more valuable collateral asset - the bank will give a larger loan increasing real estate purchase prices push rent prices up as well. so may increased interest rates, since it's harder to buy

User

so by using real estate as collateral you're just tapping into the existing low interest liquidity/credit line at the same time the property earns a yield (e.g. via rents) and generally appreciates

User Illya Gerasymchuk -

2025-09-13 14:38

so by using real estate as collateral you're just tapping into the existing low interest liquidity/credit line at the same time the property earns a yield (e.g. via rents) and generally appreciates

User

this is why a 7 day Treasury bill-backed repo agreement may have 2% haircut and a 0.1% spread, while a 20 year immovable property collateralized loan a 25% haircut and a 2% spread the T-bill is more liquid, less volatile and the loan term is much shorter

User Illya Gerasymchuk -

2025-09-13 14:37

this is why a 7 day Treasury bill-backed repo agreement may have 2% haircut and a 0.1% spread, while a 20 year immovable property collateralized loan a 25% haircut and a 2% spread the T-bill is more liquid, less volatile and the loan term is much shorter

User

collateralized lending comes with smaller interest rates/financing cost because it's low risk for the lender if you default - the lender keeps your collateral haircuts and spread are set sufficiently high to cover liquidity, term and market risks

User Illya Gerasymchuk -

2025-09-13 14:12

collateralized lending comes with smaller interest rates/financing cost because it's low risk for the lender if you default - the lender keeps your collateral haircuts and spread are set sufficiently high to cover liquidity, term and market risks

User

β‰ˆ80% of lending in financial markets is collateral-based financial institutions use government bonds as collateral for short-term loans you're using immovable property as collateral for a generally longer term-loan

User Illya Gerasymchuk -

2025-09-13 13:45

β‰ˆ80% of lending in financial markets is collateral-based financial institutions use government bonds as collateral for short-term loans you're using immovable property as collateral for a generally longer term-loan

User

real estate is a great asset because banks lend β‰ˆ75% of its value so if your property is worth $100K, you can borrow $75K against it at a low rate the immovable property is used as collateral

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User Illya Gerasymchuk -

2025-09-12 00:19

real estate is a great asset because banks lend β‰ˆ75% of its value so if your property is worth $100K, you can borrow $75K against it at a low rate the immovable property is used as collateral

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User Illya Gerasymchuk -

2025-09-08 14:54

just as charted: with the yellow line resistance broken gold has risen over 6% this thread covers the whole consolidation move, where i explained how it's a bullish precursor the original goal of this thread was to follow gold until it breaks $3.5K, and now we're 0.15K above πŸ˜„

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User

now everyone is talking about gold πŸ˜„ i've been writing about an imminent new all time high and uptrend continuation for 3 months now - you can check back up on this thread every long call in this thread has been accurate gold is a very special asset this cycle

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User Illya Gerasymchuk -

2025-09-07 19:49

remember that real estate runs on credit - and in the most basic approach - the bank happily finances 75% of the value of the property. this is true even if you're just starting as you accumulate collateral/properties it becomes easier and easier, as you can cross-collateralize

User

this increase will be more accentuated in lower per-capita GDP countries - as cross-border capital flows in to fill the price gap lower GDP + highly desired location is the recipe for higher yields πŸ˜„ you can observe this in countries like Portugal in the table below

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User Illya Gerasymchuk -

2025-09-07 19:46

this increase will be more accentuated in lower per-capita GDP countries - as cross-border capital flows in to fill the price gap lower GDP + highly desired location is the recipe for higher yields πŸ˜„ you can observe this in countries like Portugal in the table below

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User

EU real estate prices will continue to increase with investment capital moving away from US to the EU, a significant portion of it will will flow into housing, thus pushing sale and rent prices up specially true for high-demand areas, like coastal & large cities

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User Illya Gerasymchuk -

2025-09-07 19:39

EU real estate prices will continue to increase with investment capital moving away from US to the EU, a significant portion of it will will flow into housing, thus pushing sale and rent prices up specially true for high-demand areas, like coastal & large cities

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User Illya Gerasymchuk -

2025-09-06 00:24

i wrote a thread explaining the business model of banks here: https://illya.sh/threads/@1755863018-1.html the information in it is important to understand the balance sheet dynamics of gold reevaluation

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User

in order to understand the mechanics of gold revaluation - it's important to understand the unique legal position of banks to issue broad money, and that their mode of operation differs greatly from non-credit issuance businesses

User Illya Gerasymchuk -

2025-09-06 00:11

in order to understand the mechanics of gold revaluation - it's important to understand the unique legal position of banks to issue broad money, and that their mode of operation differs greatly from non-credit issuance businesses

User

soon i'll write a thread on how central banks/governments reevaluate gold and how the monetary gains can be used to cover central bank and/or government debt i'll add a link to it in this thread once it’s ready

User Illya Gerasymchuk -

2025-09-06 00:10

soon i'll write a thread on how central banks/governments reevaluate gold and how the monetary gains can be used to cover central bank and/or government debt i'll add a link to it in this thread once it’s ready

User

in practice, some level of sanitization (direct or indirect) will occur, and that Treasury debt/safe collateral would likely be reintroduced back via Treasury issuance and/or Fed facilities within a year

User Illya Gerasymchuk -

2025-09-06 00:08

in practice, some level of sanitization (direct or indirect) will occur, and that Treasury debt/safe collateral would likely be reintroduced back via Treasury issuance and/or Fed facilities within a year

User

so assuming no sanitization - an initial reduction of liquidity may occur